The James River Co.pays an annual dividend of $1.50 per share on its common stock.This dividend amount has been constant for the past 15 years and is expected to remain constant.Given this,one share of James River Co.stock:
A) is basically worthless as it offers no growth potential.
B) is valued with an assumed growth rate of 3%.
C) has a market value of $15.00.
D) has a market value equal to the present value of $1.50 paid one year from today.
E) is valued as if the dividend paid is a perpetuity.
Correct Answer:
Verified
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